Assume that the market demand line faced by a monopoly firm is Q^D=300−P, and due to the effect of economies of scale, the marginal production cost and average production cost of the firm are both fixed: MC=AC=100. (a) What quantity should the firm produce and at what price? What is the total revenue at (b) What is the deadweight loss caused at this time?
(c) Assuming that the additional cost of first-degree price discrimination by a firm